US-based MP Materials, owner of the Mountain Pass rare earth mine in California, steadied its rare earth oxide (REO) concentrate output in January-March, but revenue fell owing to a drop in sales volumes and prices.
MP produced 10,671t of REO contained in concentrate in the first quarter, down by 1pc from a year earlier but up by 2pc on the previous quarter. Sales volumes in the first quarter dropped by 13pc year on year and 6pc quarter on quarter, mainly because of the timing of deliveries, it said. Nearly a third of sales in the quarter consisted of roasted concentrate, as the company improves the stability and performance of its drying and calcining circuits.
Revenues took a substantial hit, down by by 42pc on the year to $95.7mn, while net profit fell by 56pc to $37.4mn over the same period.
"What is interesting, perplexing and quite likely bullish for the medium to long-term outlook is that with NdPr where it is now, we believe that the Chinese rare earth industry will be unprofitable at current prices. Chinese data is admittedly quite opaque, but our analysis as well as industry discussions suggest this to be the case," chief executive James Litinsky said.
Argus today assessed domestic Chinese prices for neodymium-praseodymium (NdPr) oxide at 433,000-438,000 yuan/t ex-works, down sharply from a multi-year high of Yn752,500/t ex-works on 1 February. Export prices for NdPr oxide are at $62,800-63,800/t fob China, down from February's high of $111,800/t fob.
In the company's stage II midstream sector, it continues to progress toward production of separated rare earth materials, with individual separations expected to begin in the second quarter. Commercial oxide production is scheduled to start before the end of 2023.
The company also announced that it has signed a tolling agreement to convert a portion of its NdPr oxide into NdPr metal in Vietnam. This will enable MP to produce and sell both NdPr metal and oxide. "Japan is the largest manufacturer of neodymium magnets outside China. But Japanese magnet makers have limited oxide to metal conversion capacity and have historically depended on facilities in China or southeast Asia," Litinsky said. Through its distribution agreement with Japanese trading company Sumitomo, MP has greater access to that market.
The company also continues to advance its downstream magnetics segment, centred on its magnet production facility in Fort Worth, Texas. It is preparing for the arrival of the first phase of electrowinning and strip-casting equipment required to meet its goal of delivering alloyed flake later this year.
